BUSINESS

Loonie moves lower as oil prices pull back on concern about economy

10/03/2012 09:26 EDT | Updated 12/03/2012 05:12 EST
TORONTO - The Canadian dollar ended Wednesday at its lowest level in more than a month as oil prices pulled back on concern about the global economy.

The loonie dropped 0.40 of a cent to 101.20 cents US, after last falling below that position on Aug. 30.

The currency was pressured by the latest non-manufacturing industries report from China which showed the weakest growth in more than a year and a half. The index slid to 53.7 in September from 56.3 in August, though readings above 50 indicate an expansion.

In the U.S., manufacturing data was more positive with the Institute for Supply Management, a trade group of purchasing managers, saying that its index of non-manufacturing activity rose to 55.1 in September, up from 53.7 in August.

"The latest increase continues the gently improving trend of recent months and took the index to its highest level since March," said Andrew Grantham of CIBC World Markets in a report.

"Although the index does not have a great record in tracking U.S. GDP, it is a further indication that growth should have picked up in the third quarter following a lacklustre second quarter."

Payroll processor ADP reported that companies added 162,000 jobs in September, slightly better than consensus expectations, but down from August. The data indicates that economic growth isn't gaining momentum.

The data comes ahead of the latest U.S. and Canadian jobs numbers, due Friday.

In commodities, November crude on the New York Mercantile Exchange ending the session $3.75 lower at US$88.14 a barrel.

December bullion rose $4.20 to US$1,779.80 an ounce, while December copper was down 1.7 cents at US$3.78 a pound.